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Can we lead the world with a new form of storage? Let’s sea

  • Pumped Hydro Energy Storage
  • 27 September 2017

It’s an idea that could position Australia as a world leader in pumped hydro storage: using sea water as the basis for this established method of generating and storing energy.

Earlier this month, ANU researchers funded by ARENA identified 22,000 sites around Australia suitable for pumped freshwater hydro energy storage. Now, a feasibility study funded by ARENA has examined whether it would be both economically and technically viable to develop a pumped hydro facility that utilises sea water as its storage medium.

If built, the proposed hydro facility – on South Australia’s Spencer Gulf near Port Augusta – would be the only one of its kind anywhere and a total game-changer for mainstreaming renewable energy.

A similar facility was built on the Japanese Island of Okinawa in 1999. Though the technology was considered successful it was dismantled in 2016 because waning demand meant the electricity it supplied was no longer needed.

The intake point at the pumped hydro facility in Okinawa, Japan. IMAGE: gpzagogo

WHY IT’S NEEDED

Australia is one of the best sites in the world for generating renewable energy. South Australia has proven particularly proficient, and is already well on track to meet its 2025 target of 50 percent renewable penetration; in fact, the target is likely to be exceeded in the next five years.

However, concerns over reliability of supply and the need to successfully integrate renewables into the grid have the capacity to slow the shift to renewable energy if not successfully addressed. As coal and gas are retired from the state’s electricity network and the share of renewable energy grows it’s important that we create a balanced system that meets the needs and expectations of Australian consumers.

READ MORE: PUMPED HYDRO GURU ANDREW BLAKERS ON HIS NEW RESEARCH

READ MORE: HOW PUMPED HYDRO COULD HELP SOLVE THE STORAGE PROBLEM

That means dispatchable energy resources are needed – those that can be available when they are called upon, to meet bulging demand or to play a role in balancing the system by injecting electricity into the grid.

HOW IT WORKS

Large-scale energy storage will make that possible, and pumped hydro is one of the most proven methods.

In conventional pumped hydro systems, water is stored in two reservoirs. When power supply is high or demand low, excess electricity is used to pump water uphill to the top reservoir (thus ‘charging’ the system). When supply drops or demand is high, the water flows downhill to the lower reservoir, turning a turbine to generate electricity. It’s a simple, high-capacity system with a long asset life.

But in South Australia, suitable fresh water sites – particularly in non-environmentally sensitive areas – are in short supply. That’s where the Cultana Pumped Hydro Project steps in. Using sea water also removes the need for a ‘lower reservoir’. This should help to reduce costs .

 

How the project would work. IMAGE: ARENA.

 

The Cultana consortium, made up of Energy Australia, ARUP and University of Melbourne’s Melbourne Energy Institute, has been investigating the feasibility of storing and pumping sea water at the Cultana Training Area.

This site, near the north-western tip of the Spencer Gulf and within view of Port Augusta, fits the bill in a number of ways: a facility here would have good elevation, be close to the coast, close to the grid and wouldn’t have negative effects on environmental or cultural values.

SO IS IT FEASIBLE?

The Cultana feasibility study kicked off earlier this year. Granted $453,000 by ARENA, the study set out to discover:

  • what size would be best for a pumped sea water hydro project in this area (within the parameters of 100-250MW)
  • what it would cost to set up and run the project (within a margin of +/- 30%)
  • where the money could come from to build and run the facility
  • how much it would cost to connect the facility to the grid
  • what issues the project might face with local communities, environmental groups and other stakeholders
  • whether market or regulatory changes could affect the project
  • whether the project would be technically and economically feasible.

While freshwater pumped hydro is a proven technology, using sea water brings complications and greater costs. Dealing with marine habitats means bigger up-front construction costs, and keeping sea-water-supplied systems clean and uncorroded is more expensive. The study found these problems were surmountable at the site, and that the facility would be technically feasible.

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The study found the facility could be in operation by 2023, at an optimal size of 225MW with storage of 1,770MWh. It would cost $477 million up front with running costs of $11-12 million per year. This works out to $2.1 million per MW of capacity, or $270 per KWh of storage. That would be about one-third the cost of equivalent battery storage (these numbers fall within the specified +/- 30 per cent stipulation).

WHERE WOULD THE MONEY COME FROM?

The study consortium found no extraordinary measures would be necessary to fund pumped hydro at the site. Revenue could come from spot price arbitrage on the power generated, selling cap contracts (or hedges against extreme electricity price events), buying non-firm energy from renewable energy suppliers at a fixed price and selling into firm baseload or peak markets at a fixed price, or raising ancillary market revenues (such as supplying inertia, voltage support or system restart services).

Cultana by the numbers. SOURCE: ARENA.

The project, were it to be built, would have a post-tax nominal rate of return of 8% to 12%, depending on the revenue assumptions used. In other words, pumped sea water hydro energy storage at Cultana can be considered economically viable in a number of scenarios.

The Cultana consortium is keen to see further work done on the project. They would like to look at an alternative proposal for the facility that could reduce capital costs, and they see potential to further firm up the project costs and revenue potential, particularly given recent developments such as the Finkel Review and the South Australian Government’s Energy Plan.

Whatever this further work discovers, the report from the Cultana Pumped Hydro Project is an extremely promising development for expanding renewable energy generation and transmission in South Australia.

Indeed, there is no reason sea water pumped hydro couldn’t be explored in other sites across Australia, likely with equally positive results. For a country with vast wind and solar resources and limited fresh water, the finding that pumped sea water hydro is both technically and economically viable is encouraging news.

Download the Cultana Pumped Hydro Project Report here (PDF, 5mb)

  • Greg Shanahan

    Utilising the wave energy at the intake could create further enhance efficiencies in pumping the water up to the storage point. By designing a funneled entry point with a one way gate, you would have 24 hr a day pumping. Solar panels could assist when the sun is shining but the swell is low. Cloudy days would tend to occur when low pressure systems are dominant, which would tend to enhance swell with wind waves.

  • Peter Davies

    ???! Naturally stored solar energy (biomass) can be accessed using Australian developed technology for as low as $1.5Million/MW of capacity and generates new energy. SA Bioenergy Road map project identifies sufficient sustainable sources for around 3GW of dispatch able generation capacity. Such can be configured to make use of existing/new renewable grid connection infrastructure & load follow to maintain grid integrity from these locations, supporting growth of more wind/solarPV until such reaches a scale where genuine excess daily capacity would warrant the cost of implementing storage whilst creating new regional industry, jobs and other flow on benefits. This study budget amount would have enabled building a 0.5MW dispatch able proof of concept power plant delivering up to 4000MWh/yr.

  • gbails

    Do both!

  • Peter Davies

    Indeed, I am not against storage, in fact I think the real benefit of storage is being overlooked, it is the leveling of energy supply in more predictable ways. Not simply framed as for storing renewables alone when there is power excess, but as a flexible load bank allowing greater inertia & timing of supply decoupled from real time generation that would benefit all suppliers & consumers. Bio-refinery plants that have dispatch-able power capacity serve as additional buffering & reduce reliance on Natural Gas & the pressure to frack up the place that will do permanent harm.

  • Jonathan Prendergast

    Great info Arena!

    2 major challenges:
    – Network charges: Pumped hydro uses electricity to pump/’charge’ (obviously). It has to pay network charges, which could be from $2m to $7m p.a. just for capacity payments. Seems unfair considering the purpose of pumped hydro is to support the grid, not rely on it.
    – Revenue forecasting: I assume the revenue is based on historical data. But it is impossible to forecast, so very challenging to make an investment decision. Would be great to get this project up and going, even if it needs 50% Arena Funding

  • Goresh

    Electricity prices vary with time of day. If you pump while prices are low and generate when prices are high, you turn a profit.
    The problem with most power sources is that production does not always match demand, this is true even for coal because coal is slow to spin up and spin down generators.

    Either there is excess generation which is wasted or a shortfall which means blackouts.

    “Batteries” smooth demand and reduce overall cost.

  • Goresh

    Queenland built the 500mw pumped hydro system at Wivenhoe Dam back when there was NO RENEWABLE generation here.
    It was built because coal generators are slow to spin up and down while changes in demand are very quick.
    Since then 60% of coal generation capacity has been mothballed and the daily summer blackouts I grew up with as a kid have simply ceased happening.

    It is unfortunate that the facility is only allowed to supply peak demand as for much of the time it can feed electricity into the grid far below the current spot price.

  • Allan Lugg

    “……wouldn’t have negative effects on environmental or cultural values.”
    The land within and downslope of the upper reservoir will be salinised. Some loss of vegetation and habitat is unavoidable.

  • Alastair Leith

    They could use a pond liner, they’ve been used on extremely large reservoirs in Australia where water skiing takes place (to give a sense of the scale)

  • Alastair Leith

    It’s owned by a corporation who would rather get paid to burn gas, so unfortunately it’s rarely dispatching these days.

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